UDG Healthcare starts 2017 strong but affected by weak sterling

UDG Healthcare made a good start to 2017 with operating profits for the first quarter well ahead of last year, driven by continued growth and the impact of acquisitions, although profit growth was moderated by a favourable foreign exchange rate.

Due to the fall in the value of the pound, effect from 1 October 2016, the company now reports its financial results in dollars and expects constant currency adjusted diluted earnings per share for the year to 30 September 2017 to be between 13% and 16% ahead of last year's earnings per share of $ 31.8c.

UDG said that it is likely to face a foreign exchange headwind on the translation of sterling profits in the 2017 financial year.

Meanwhile, the Ashfield business, which commercialises services for the pharmaceutical and healthcare industry, traded well ahead in the quarter ended 31 December compared to last year with growth supplemented by acquisitions, such as Stem in October 2016.

Within the Ashfield Commercial & Clinical business, operating profit growth was strongest in the US, as it ramped up activity following contract wins, while profit was also ahead of last year for the Ashfield communications business.

In the Sharp packaging services business, operating profits were “moderately ahead” of last year with its US business increasing activity levels following the expansion of its facility in Pennsylvania.

It is also preparing for the serialisation of prescription products from November, which is expected to have a “material benefit” on performance in the second half of the year.

In Europe, Sharp is focused on converting its improved biotech business development pipeline into new business activity.

While, operating profit for the Aquilant business, which provides sales, marketing, distribution and engineering services, was in line with the same quarter last year.

Shares in UDG Healthcare were up 2.36% to 650p at 0821 GMT.